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Technology Stocks : Dell Technologies Inc. -- Ignore unavailable to you. Want to Upgrade?

To: Lee who wrote (74397)	10/25/1998 11:00:00 AM
From: rudedog	Read Replies (1) \| Respond to of 176387

Lee - It looks to me as if Dell will be going horizontal, not vertical. They are much more likely to be successful with a play involving an internet offering, or something tied to e-commerce, since they have both mindshare and expertise in those areas. This direction would also fit the lightweight, fast-moving Dell style. As I have said several times before, a services move adds an expensive, high-fixed-cost component to Dell's business and also pits them directly against CPQ and IBM in an area where those 2 companies dominate. It would be a difficult competitive effort. Dell would take a long time to build the capability, during which time the analysts and investment community would be looking at reduced earnings and ROIC and lowered GMs. I doubt that Dell would go there when they can hit the net/e-commerce target with less investment and almost immediate return, and also a better long-term revenue potential. Dell has 'early-mover' advantage in that space as well.